Changes to rooftop solar tariffs in New South Wales could see the state become a leader in the uptake of residential battery storage, as 160,000 solar households prepare to lose the premium tariff for their solar output.
A new graph from the Clean Energy Finance Corporation has revealed there are around 160,000 households in NSW that are currently receiving a premium tariff of 60c/kWh for their solar output (plus a retailer bonus), and these tariffs will finish in January 2017.By then, the solar systems they installed will have paid for themselves. The question for these household then becomes, what to do with the surplus electricity produced by the arrays, particularly given that tariffs are only voluntary, or around 6c/Wh or 8c/kWh at best?
Battery storage may be an answer. The graph from Simon Brooker, executive director of corporate and project finance for the Clean Energy Finance Corp, suggests that the returns could be quite good, and that battery storage added to rooftop solar systems will still be competitive and even beat grid-based tariffs.
Even these assumptions could be seen to be conservative, given that battery storage prices are likely to fall well below $1,300/kWh – particularly by the end of next year.
“We are not talking 40c/kWh or 50c/kWh. We are talking much more interesting numbers,” Brooker noted.
UBS analyst David Leitch told the conference that there was huge potential for cost reductions in battery storage, given that battery cells and storage systems were being sold in China for under $200/kWh, yet were being sold for nearly 10 times the price in Australia. That meant there were huge potential for falls along the value chain.
Morgan Stanley analyst Rob Koh said the key for battery storage take-up would also be on the structure of tariffs set by utilities, including time of use tariffs, the level of fixed and locked in payments, and newly mooted capacity payments.
© 2015 Solar Choice Pty Ltd